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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2018-11-07 Daily Xml
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Nyrstar

The Hon. T.J. STEPHENS (15:02): My question is to the Treasurer. Treasurer, can you please update the chamber on the current situation with Nyrstar?

The Hon. R.I. LUCAS (Treasurer) (15:02): I think on one or two occasions previously I have updated the house in relation to the issues about Nyrstar. Given the events of the last 24 hours, I am happy to share some further information with members to that effect. I think the first thing I would say—and I'm sure it is the view that is shared by all members in this chamber—is that we are very hopeful for the many, many families in Port Pirie that the proposed redevelopment of Nyrstar and its operations will eventually prove to be very successful in terms of the long-term protection of jobs in the community. But I have to say recent events have raised some matters of concern.

As I shared with members earlier, the former Labor government entered into an underwriting deal, which has the taxpayers of South Australia potentially guaranteeing $291.25 million in relation to the success or otherwise of this particular redevelopment. I advised the house soon after May, I think it was, that the first of the significant repayments was due in May this year, and Nyrstar had originally indicated they would not make any of that particular payment. Subsequently, they did pay the distribution amount component of that repayment, which was $7.9 million, approximately $8 million, but did not repay the $29.125 million redemption of perpetual securities amount, which the state was expecting to receive.

The next repayments are due this month—again a repayment of just over $10 million in terms of what is known as the distribution amount and $29.125 million in terms of a redemption of perpetual securities. Our advice had originally been that there might not be any payment; our most recent advice is that the state might receive the distribution amount payment, which is the $10.1 million but a continued refusal of Nyrstar to make the more substantial $29.125 million payment in terms of the redemption of perpetual securities.

The other concerning thing in addition to that has been the, I guess, response of the global market to Nyrstar. Without going through all the details—I am sure many members follow these issues with great interest—the share price of Nyrstar since August of this year has plummeted some 71 per cent. I will not put on the public record a number of the public statements made by analysts from Morgan Stanley and other international agencies, or groups, I should say, commenting about the financial prospects of Nyrstar. They are on the public record anyway, but it serves no good purpose for me to repeat those again in this house. Nevertheless, allied with what's on the public record in terms of the share price of Nyrstar, together with the fact that repayments haven't been made as they were meant to be repaid, are matters of significant concern.

Of great concern, obviously, to the families and workers in Port Pirie was the news that the AWU yesterday revealed—that they had been told that some 100 jobs were likely to be lost in the very near future from Nyrstar. I must admit when I first looked at the complicated $291.25 million deal the former Labor government had done I did have some significant issues and concerns. I didn't share all of those at that particular time, but one of the great concerns I had was when I asked the question in relation to what are the requirements on Nyrstar for this investment by the taxpayers of South Australia for the $291.25 million?

Perhaps not unreasonably, as with most of these funding or loan deals, there is generally a commitment to have increased employment, and I think members will be familiar that the former government, and governments of all persuasions, have offered grants and loans, underwriting to various companies, in a deal which has necessitated increased employment over a period of time.

Perhaps not unreasonably in relation to this there was no such commitment written into this deal. But I must admit I was stunned when I was advised that the deal done by the former treasurer, the member for West Torrens, Mr Koutsantonis, and the former government has no requirement at all in relation to the retention of jobs at Nyrstar. So the former treasurer, the former government, has signed a deal committing potentially the taxpayers of the state to $291.25 million, and there is no requirement at all in the deal to maintain jobs in Port Pirie and Nyrstar.

When I was told I was stunned. I asked Treasury officers and others just to go back and check. I said, 'Surely that couldn't be the case.' Surely it wouldn't be a situation where on behalf of taxpayers the former government, the former Treasurer, would have signed a deal in relation to such a significant sum of money without any requirement at all. Sadly that is the situation, so in the circumstances we have seen yesterday, with the announcement according to the AWU that 100 jobs are to go, there is nothing within the agreement that the state can do.

I have to say, and I put on the public record, that I think the former treasurer and the former government's handling from the taxpayers' viewpoint is financially incompetent. It borders on negligence. The interests of the taxpayers, but, more particularly, the interests of the workers and their families at Nyrstar in Port Pirie were not protected by the former treasurer and the former government when they signed this particular deal.

I think the former treasurer, the member for West Torrens, should be dragged by the scruff of the neck up to face the workers at Nyrstar in Port Pirie, to answer the question: 'Why, when you committed $291.25 million of taxpayers' money, did you not put our interests, in terms of jobs at Nyrstar, to the forefront when you signed this particular deal?'

I think the former treasurer owes not only the workers at Nyrstar at Port Pirie but owes the community, owes the taxpayers and owes the parliament the responsibility to stand up and explain why—when he undertook this deal and negotiated the deal and was party to the deal, together with the rest of the cabinet—the interests of the workers and their families at Nyrstar were not at the forefront of the discussions, and why there was not some degree of protection in relation to jobs in the funding agreement that was undertaken.

In relation to the situation, on behalf of the government, I have had constant correspondence with Nyrstar in terms of its commitments—to the extent that we can under the deal—correspondence with Mr Hilmar Rode, the global CEO of Nyrstar located in Zurich. He has undertaken to come to South Australia, I think on 19 November, and we have a meeting organised in relation to the issues in relation to the deal that has been negotiated, the future of Nyrstar and, clearly now, the interests of the workers and their families at Nyrstar.

I conclude by saying that it is certainly my view and the view of the government that we will do everything we can, within the constraints of the deal that the former Labor government negotiated, to try to ensure the protection of the jobs of workers at Port Pirie at Nyrstar, but also at the same time to try to protect the interests of the taxpayers of South Australia who potentially have $291.25 million swinging in the breeze on the basis of a deal negotiated by the former treasurer which in my view, as I said, was not only financially incompetent but bordering on negligent.

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